REAL ESTATE ADVICE
Redfin | June 27, 2022
Demand for vacation homes has fallen below the pre-pandemic baseline for the first time in two years, with mortgage-rate locks for second homes down 4% from before the pandemic in May, according to a new report from Redfin, the technology-powered real estate brokerage. That’s down from a revised rate of 3% above pre-pandemic levels a month earlier, and 70% above pre-pandemic levels a year earlier.
Demand for second homes is declining due to high home prices, mortgage rates that have rapidly risen to nearly 6% and a slumping stock market–factors that are also cooling the rest of the housing market. Another deterrent to second-home buyers is the fact that the federal government increased loan fees for second homes in April, adding roughly $13,500 to the cost of purchasing a $400,000 home.
Skyrocketing monthly payments, along with higher loan fees, have priced many second-home buyers out of the market. Many would-be second-home buyers are also deterred by turmoil in the stock markets, high inflation and recession fears, and they can be quicker to pull back from the market because vacation homes aren’t a necessity the way primary homes are. The cooldown in the second-home market is likely to continue as long as mortgage rates are elevated and the stock market is slumping.”
Taylor Marr,Redfin Deputy Chief Economist
The drop in vacation-home demand marks a drastic change from the second half of 2020 and 2021, when mortgage-rate locks for second homes skyrocketed due to record-low mortgage rates and the flexibility to work from anywhere thanks to remote work. Demand peaked in March 2021, when it was about 90% above pre-pandemic levels.
Interest in vacation homes started declining sharply in February as mortgage rates began their ascent. The average 30-year fixed mortgage rate reached 5.81% in the week ending June 23.
Redfin is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.
REAL ESTATE INVESTMENT
Capital Square | May 25, 2022
Capital Square, a national real estate investor and an active developer of multifamily communities, announced the launch of Capital Square Multifamily Development Fund I, L.P. The fund seeks to raise up to $300 million in equity from institutional investors who will participate in the development of a portfolio of ground-up, multifamily real estate communities located in emerging secondary markets in the Mid-Atlantic and Southeast regions of the United States.
There is a shortage of quality housing that traces its origin to the Great Real Estate Recession. The shortage was exacerbated by the COVID-19 pandemic that delayed or halted many new developments. To accelerate the development of new Class A institutional-quality multifamily communities, the fund will focus on shovel-ready, ground-up sites. Capital Square is bullish on Class A multifamily investments that generate an unrivaled combination of stable cash flow, appreciation potential and inflation protection. Investors are flocking to the multifamily asset class."
Louis Rogers, Founder and Chief Executive Officer of Capital Square
Capital Square Multifamily Development Fund I continues Capital Square's focus on investing in quality multifamily assets that have an opportunity to provide outsized returns to investors. The fund will invest in the limited partner equity portion of the capital stack and will focus on emerging secondary growth markets (e.g., Richmond, Charleston, and Knoxville) that lack institutional capital investment, including Richmond, Virginian, Charleston, South Carolina, and Knoxville, Tennessee.
"The housing crisis in this country has created strengthening fundamentals in our target markets, and multifamily investment continues to provide strong opportunities for compelling risk-adjusted returns for investors and will do so for the foreseeable future," said Whitson Huffman, chief strategy and investment officer.
Capital Square Multifamily Development Fund I seeks to invest in more than $850 million of development projects. The portfolio is expected to be comprised primarily of multifamily developments sponsored by one of Capital Square's vetted joint venture development partners. Under its current growth strategy, Capital Square plans to launch additional multifamily development fund offerings approximately every two years.
Over the past 10 years, Capital Square has completed more than $5.6 billion in real estate transactions in emerging secondary markets, including the acquisition of 13,100 multifamily units. Additionally, Capital Square is currently developing eight multifamily projects totaling 1,954 units. The company has cultivated an extensive network of owners, developers, and commercial real estate brokers that provide comprehensive sourcing ability and market intelligence.
About Capital Square
Capital Square is a national real estate firm specializing in tax-advantaged real estate investments, including Delaware statutory trusts for Section 1031 exchanges, qualified opportunity zone funds for tax deferral and exclusion and a real estate investment trust (REIT). In recent years the company has become an active developer of multifamily properties in the southeastern US, with eight current projects totaling approximately 2,000 apartment units with a total development cost in excess of $600 million. Since 2012, Capital Square has completed more than $5.6 billion in transaction volume. Capital Square's executive team has decades of experience in real estate investments. Capital Square's related entities provide a range of services, including due diligence, acquisition, loan sourcing, property/asset management, and disposition, for a growing number of high-net-worth investors, private equity firms, family offices and institutional investors. Since 2017, Capital Square has been recognized by Inc. 5000 as one of the fastest growing companies in the nation for four consecutive years. In 2017, 2018 and 2020, the company was also ranked on Richmond BizSense's list of fastest growing companies. Additionally, Capital Square was listed by Virginia Business on their "Best Places to Work in Virginia" report in 2019 and their "Fantastic 50" reports in 2019 and 2020.
REAL ESTATE INVESTMENT
DJE Texas Management Group | June 14, 2022
DJE Texas Management Group (DJE), a vertically integrated real estate investment and management company based in San Antonio, has closed on The DJE North Portfolio.
The North Portfolio contains 600 apartment units throughout three apartment communities in North Central San Antonio. The properties are located at
12221 Blanco Road
7302 University Row
8631 Fairhaven Street
The three properties are conveniently located within 15 minutes of each other and are situated ideally amongst DJE's other multifamily properties in the same submarket. DJE Properties, will manage the asset and execute a $5.2M value add business plan that includes a rebrand, property renovations, and operational improvements. Renovations will include the addition of washer/dryer units, amenity upgrades in all units, exterior community building and swimming pool upgrades.
This multi-property renovation project will not only enhance the communities in which they are located, but it will also help to meet the city's growing need for quality housing."
Devin Elder, Founder, and CEO of DJE Texas Management Group
The majority of property improvements are expected to be completed by the end of 2023. To date, the organization has invested in over 5,000 apartment units across 17 multifamily real estate assets. and continues to expand its portfolio. DJE Texas Management Group holds firm to its core values and strives to create passive investment strategies where everyone involved wins.
About Devin Elder and DJE Texas Management Group
Devin Elder is Founder & CEO of DJE Texas Management Group, a vertically integrated multifamily investment firm based in San Antonio, Texas. Since 2012, the firm has completed hundreds of successful investment projects including many full-cycle multifamily investments. Devin has led his team in the renovation projects that have improved over 5,000 multifamily units. He is a helicopter pilot, a podcast host, and the owner of a real estate consulting firm, and he spearheads the DJE Foundation supporting disadvantaged children in Texas and the Philippines.